By Marisa DeZara
As with any large industry, the marijuana sector’s success relies on smart investments, successful marketing strategies, keen business ideas, and ultimately, profits.
Peter Thiel, venture capitalist and co-founder of PayPal, is considering a multimillion dollar investment in Seattle-based private equity firm, Privateer Holdings, according to CNBC. The source, who remains unidentified, “has knowledge of Thiel’s Founder’s Fund.” Although Business Insider reported the initial investment at $75 million, that figure may be off; according to CNBC’s source, $37.5 million is closer to the amount being discussed.
If this rumor means anything at all, it simply reconfirms the prosperous and promising nature of the marijuana industry, for both now and the future. Evidently, this space has, and will continue to, attract big-name investors. However, the success of the marijuana space raises one particularly troubling question: Will the marijuana industry become concentrated like that of “Big Tobacco” and “Big Pharma”?
“The legalization movement in the last few years has been about one thing and one thing only, and that is money. There are a small number of individuals who think there is a lot of money to be made and this is the next massive industry,” said Kevin Sabet, co-founder of anti-legalization group Smart Approaches to Marijuana.
The fear seems to be that the industry’s fate is inevitable; as the marijuana sector becomes increasingly corporate, safety and efficacy of marijuana products may fall to the wayside; public health concerns will be compromised to sustain profits and keep production costs down. For instance, when the tobacco industry began to thrive, additives and addictive properties were included in the manufacturing of cigarettes. Will marijuana products follow the same detrimental path? Is it possible that the industry will become so corporate to the point at which just a few companies will have control of the production and distribution of marijuana goods?
In looking at how the marijuana industry has established itself so far, these questions are valid. After all, the industry is worth billions, and big-time investors, like Peter Thiel, are taking an interest in this space. The assumption that the marijuana industry will become “Big Pot” is a possibility, but certainly not inevitable.
The industry, by and large, has done a good job of regulating the safety and potency of marijuana products, not to mention the fact that testing is being done from within the industry. In fact, testing and lab services, which commonly analyze marijuana products for safety, are on the rise, and often privately owned. Additives, like addictive properties, are unnecessary for cannabis, seeing that the natural product brings in massive profits on its own.
Most importantly, perhaps, is the fact that the marijuana industry appeals to the independent grower, the small business owner, and the venture capitalist alike. The industry has stimulated economic growth and it is full of opportunities for anyone willing to put in a little bit of time, effort and money.
Unlike “Big Pharma” and “Big Tobacco,” the marijuana industry is wide open, at least for now.